CONDOMINIUM SALES AT KIPS BAY TOWERS ARE UPHELD BY JUDGE

By WILLIAM G. BLAIR

Published: May 10, 1984

A judge in Manhattan has upheld the conversion of Kips Bay Towers from rental to condominium housing.

The ruling came in a case brought by a condominium purchaser who questioned whether the project could be converted without the approval of the city's Board of Estimate. The twin- tower complex, with 1,120 apartments, is bounded by First and Second Avenues and 30th and 33d Streets.

The purchaser, Martin Kramer, had argued that the title to his apartment was clouded because the conversion sponsors, Kips Bay Towers Associates, had not abided by a 30-year-old covenant in the project's original deed that prohibited an ''increase in density or change in land use'' for 40 years without city approval. Class Action Suit Dismissed

Justice Alfred M. Ascione of State Supreme Court in Manhattan made the ruling last Thursday in dismissing a class action suit brought by Mr. Kramer on behalf of all the purchasers.

Judge Ascione said the language in the 1953 redevelopment plan ''makes it clear that land use refers to multifamily residential use, and density means population density.''

''A change in the form of ownership is not such a change,'' Judge Ascione said in ruling against Mr. Kramer, who was seeking more than $500 million in punitive and compensatory damages for the purchasers.

Mr. Kramer's lawyer, David A. Goldstein, said the decision would be appealed.

Kips Bay, completed in 1963, was built as a slum-clearance project under Title I of the Federal Housing Act of 1949. The act was intended to meet the critical shortage of residential housing in cities after World War II. 24 Title I Projects in City

The office of Andrew J. Stein, the Manhattan Borough President, said there were 24 Title I projects in New York City. At the end of last year, only half of them were still rental projects.

The conversion plan for Kips Bay Towers became effective in November 1981. Subsequently, 70 percent of the apartments were purchased, 50 percent by tenants and 20 percent by nonresidents, including Mr. Kramer.